In practical terms, TONO has now opted to reduce its digital compensation fee with 50%. Up until now, TONO has operated with a 12% fee on all forms for music purchases, including on-line sales. In a bid to boost sales of the domestic repertoire featured on the legal download services Phonofile, TONO will reduce its compensation fee from today’s app. NOK 2 (€ 0,20 incl. VAT) to NOK 1 for each downloaded song.

Says TONO’s managing director Cato Strøm to the Norwegian Broadcasting company on the reduced fee level: “These measures have been taken in an effort to help Phonofile which is the sole legal outlet for on-line sales of Norwegian music. We realise that we cannot compete with internet piracy - this more a contribution to a process that will make legal on-line music sales more appealing. We expect Phonofile to reduce their prices accordingly, and for the future we hope that musiconline.no’s price level can match Apple’s iTunes services which operates at a rate of app. NOK 7 per audio file.”

Phonofile is a digital music archive and a central distribution outlet for legal audio files featuring only domestic repertoire. Phonofile operates the groundbreaking legal download service www.musiconline.no(which MIC’s Listen to Norway music shop s a part of) that presently offers 46 170 audio files from nearly a hundred Norwegian record labels.

Recently Phonofile/musiconline.no has been the focus of some criticism regarding the download services’ price level and sound quality. In a bid to please the market, Phonofile reduced musiconline.no’s price level – from NOK 12,50 per song to NOK 9,5 (app. € 1,14) per downloaded audio file.

The present bit-rate of 96 kbps is a bit too low for some users, and given today’s generally extensive broadband access, Phonofile plans on upgrading the audio quality to a more hi-fi friendly 192 kbps.

Phonofile’s audio file distribution technology is likely to reach a wider audience as the company is now seeking to export its services to an international market. Concrete plans to licence the Phonofile technology to among other countries Denmark and Belgium are being laid. Institutions from several countries have expressed great faith in Phonofile’s technological solutions, and a further expansion of the download services is likely.